Restrictive Covenants - Detailed Analysis

Last Updated: October 2022

(a) Negligent Misrepresentation Connected to a Restrictive Covenant

Despite finding that the purchaser of a fishing business negligently misrepresented to the vendor that there would be a place for him with the business subsequent to the sale, the trial court was found to have erred in refusing the enforce the non-competition agreement negotiated as part of the terms. The Nova Scotia Court of Appeal that that covenant was at the heart of the entire purchase and sale transaction and not considered by the parties to be severable. The court referred back to the trial court an assessment of the defendant’s damages for the plaintiff’s breach of the non-competition agreement as well as the plaintiff’s losses for the negligent misrepresentation.1

  1. Smith v. Union of Icelandic Fish Producers Ltd., 2005 NSCA 145 (CanLII).